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On clean energy, Ohio Senate Bill 315 much-improved, but more work to do

On Tuesday the Ohio Senate voted to approve Substitute Senate Bill 315 (SB 315), the Governor’s energy bill. Thanks to the work of clean energy businesses and environmental advocates in Ohio, and Senators Hite, LaRose, and Widener, who were willing to stick their neck out for clean energy, the bill that passed today is much-improved.

For some background, Ohio has three clean energy standards in existing law:

the Advanced Energy Standard, which requires utilities to get 12.5 % of their energy mix from “advanced energy resources”(mainly low carbon sources of energy like a new nuclear plant, combined heat and power project, or a coal power plant that captures and sequesters its carbon dioxide emissions) by 2025; and

the Energy Efficiency Standard, which requires utilities to run programs that help their customers save energy. I’ve spent most of my time in Ohio the last four years focused on energy efficiency and renewable energy. See here, here, and here.

SB 315 as it was introduced would have added Combined Heat and Power (CHP) and Waste Energy Recovery (WER) as eligible technologies in the renewable and efficiency standards. NRDC opposed the addition of the technologies to the renewable energy standard because they don’t meet the definition of “renewable” (both use fossil fuels), and adding sizable new resources to the renewable standard would undermine the hundreds of millions of dollars that renewable energy project developers invested in Ohio under the renewable standard. Adding CHP and WER to the energy efficiency standard would displace energy efficiency programs, which are saving energy at one-third the cost of producing it.

The bill that passed today includes measures that will reduce the degree to which CHP and WER deployment will undermine investments in renewable energy and energy efficiency. Together, even with these measures, the bill is far from ideal. But it is much better. Some of the good provisions:

Only new CHP and WER projects (with an exception I’ll talk about below) can count toward renewable energy and energy efficiency standards. Environmental advocates and clean energy businesses worked very hard advocating for this, and I’m glad we won this provisional victory.

WER projects can count toward either the renewable or efficiency standards.

CHP projects can count toward the efficiency standard, but these projects have to meet minimum thermal efficiency requirements.

CHP projects can’t count toward the renewable energy standard (with the same exception I’ll talk about below). This is good because CHP projects are essentially efficient natural gas plants, and natural gas is not a renewable energy source.

We can thank Senators Hite, LaRose, and Widener, and clean energy businesses, for supporting a compromise that included the protections above. They’ll help preserve the intent and environmental benefit of the renewable energy and energy efficiency standard.

But the bill should be improved in the House.

One bad provision allows existing, in-the-ground CHP projects at state colleges and universities to count toward the renewable standard or the energy efficiency standard. CHP projects shouldn’t be let in to the renewable standard: they’re basically efficient natural gas plants, as I mentioned before. Also, these projects have already been developed; electricity customers shouldn’t have to give the developers a windfall. My understanding is that this amendment was designed to funnel incentives to projects at Kent State University and Cincinnati State. A second bad provision would allow biologically-derived methane gas (for instance, from an anaerobic digester or a landfill) to count as renewable electricity, even if it isn’t made into electricity. Read that sentence again. It doesn’t make any sense. A final provision worth noting: any new or repowered power plant in Ohio can count toward utilities’ advanced energy targets: even conventional simple-cycle gas turbine would as “advanced energy.”

So how did SB 315 turn out for clean energy? It is one step better than before, but these bad provisions take us a half-step back. We look forward to working with our allies to improve the bill in the House.